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Estate Planning

Estate planning is all about deciding how your estates and assets will be divided or managed after your passing. An estate plan can also go into effect if you are incapacitated or unable to manage your estate. Planning today ensures your estate is handled as you envisioned without any questions or misunderstandings. This piece covers the basics of estate planning, its benefits, and what's involved.

<b>What is Estate Planning?</b>

What is Estate Planning?

Understanding what's involved in planning the management of an estate starts with defining the undertaking; what is estate planning? The simple definition of estate planning is "preparing the tasks and steps to manage your asset base in the event of incapacitation or death."

Estate planning uses various devices, such as a will, trust, or insurance policy. The objective is to lay out your wishes and ensure the estate is managed or transferred in the most tax-advantaged manner. You may also need an estate planning financial advisor to understand the process fully.

What Does Estate Planning Involve?

The basics of estate planning are its documents. To set up plans, you'll need various documents to prove ownership of the assets and declare how they'll be handled following death or incapacitation. Here are the popular documents making up your estate plan:

  • Will: The legal document expressing your last wishes on how your assets and property will be distributed, transferred, or handled after your passing.
  • Trust: Refers to a three-party fiduciary agreement. The three parties are the settlor (trustor or grantor), trustee, and beneficiary. A trust allows the settler to grant the trustee rights to hold assets and property on behalf of a trustee.
  • Guardianship: Expresses your wishes concerning who should care for your children or dependent if you die or become incapacitated. Guardianship instructions are often part of the Will.
  • Financial POA: Financial power of attorney (POA) gives someone else the power to handle your financial affairs.
  • Durable POA: Durable POA is a variation giving someone else the power to handle non-health/non-medical affairs. Even if you become incapacitated, the durable POA will remain in effect.
  • AHCD: Also known as Living Will or Medical power of attorney. The advance healthcare directive declares the medical actions to be taken if you become incapacitated or unable to make your decisions.
  • HIPAA Authorization: Refers to consent allowing a third party to access your medical records and information.

Financial estate planning is prevalent among people in their 50s, but everyone needs it. You can start planning at any age, provided you have existing assets/property. You should also plan with taxes in mind. You don't want your heirs paying hefty estate and inheritance taxes. An estate planning financial advisor can help you avoid probates and unnecessary taxes.

The Benefits of Estate Planning

Financial estate planning benefits you, your children, heirs, and dependents. It involves managing all your assets, including cars, cash, clothes, jewelry, art, houses, savings, investments, land, retirement accounts, and more. Here are five top advantages of planning your estate:

  1. Protects Your Assets: Estate plans are legal documents demonstrating how your assets will be distributed, transferred, or managed. You can set up measures to protect assets for longevity after your passing.
  2. Protects Your Children: An estate plan declares who should take custody of your younger children and who holds the property on their behalf. Estate plans can also provide care, lifestyle, and education instructions.
  3. Reduces Tax Payments: Your financial estate planner can help you avoid specific taxes and probates. The goal is to ensure your heirs and beneficiaries get the most without losing money to avoidable taxes.
  4. Prevents Family Disputes: With a clear will, trust, or other valid documents, you can declare who will inherit what, eliminating doubts and misunderstandings after your death or incapacitation.
  5. Protects You: Delegating power of attorney and describing medical care procedures can protect you in the event of incapacitation. You'll get the best healthcare and can choose people you trust to manage your affairs.

Working With an Estate Planner

Hiring an estate planning financial advisor is the best decision for those looking to plan their future. Estate planning is a complicated undertaking with many aspects to consider. Involving a financial estate planner will provide the professional insight and experience needed to meet your goals. Find out more about estate planners and how they can help.

Frequently Asked Questions

Why do I need to have an estate plan?
You've worked hard to own an estate and deserve to share it per your wishes. Estate planning allows you to determine how the estate will be divided or managed when you can no longer make such decisions due to death or incapacitation.

What should estate planning cover?
Estate planning should cover all assets and property, including investments, savings, and retirement plans. It involves declaring all your estate and how they'll be distributed.

What is the difference between a will and estate planning?
A will is a legal document expressing your last wishes about how your property should be shared. Estate planning involves planning for asset distribution, power of attorney, and custody, in the event of death or incapacitation.

For more information about our firm and the services we offer, send us a quick email or call the office. We would welcome the opportunity to speak with you.

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